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3.Facts in brief:-

3.1.A Trust was started in the year 1924, by name "The Willington". The said Trust acquired a property bearing Door No.1/4, Marshalls Road, Egmore, Chennai  600 008. Thereafter, a resolution was passed by the Trust on 27.02.1971 to constitute a Charitable Trust in the name of "The Willington Charitable Trust". The assessee's Trust Deed mentioned the objects such as, to establish, run or maintain educational, technical or technological institutions of all kinds in India for the benefit of the public, to award scholarshiips and stipends for education, to institute Lectureships and arrange lectures and establish endowments for such purposes and to institute and maintain or support hospitals, dispensaries etc. The Honourable High Court of Madras in C.S.No.76 of 1973 by its order dated 08.03.1973 has confirmed the consideration of the assessee Trust on the acquisition of the property mentioned above as the one vested with it as a Trust property. The assessee Trust is also registered under Section 12A(a) of the Income Tax Act, 1961 (hereinafter referred as "the Act".

5.Findings of The Commissioner of Income Tax (Appeals):

5.1.The Commissioner of Income Tax (Appeals) has held that the assessee has been maintaining three sets of accounts such as, one set of books for the income from auditoriums as well as for interest receipts, one set of books for the income of the trust, wherein it accounts donations and interest receipt. The assessee accounted it's donation receipts from the occupants of the auditoriums in these books only. The assessee finally consolidated both the above accounts and prepared it's income and expenditure account as well as its Balance Sheet and one set of books for the income from the ladies hostel account and hence there is compliance of the condition stipulated under Section 11(4)(A) of the Act by maintaining separate accounts. The Commissioner of Income Tax (Appeals) has also held that in as much as the income derived by the assessee through its commercial activities is being used towards its object which is a charitable purpose, its activity of indulging in such a business is not a business activity independent of the objects of the Trust and the same has to be considered as incidental activity to the charitable activities. Therefore by holding so the Commissioner of Income Tax (Appeals) allowed the appeals filed by the assessee except for the assessment years 1995-96 and 2000-01. In so far as the assessment years 1995-96 and 2000-01 are concerned, the Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Authority by holding that the construction for the college for women and the construction of school building cannot be said to be charitable objects of the assessee as the same would amount to utilisation of the income. Therefore, the appeals filed by the assessee for the above said years were dismissed against the assessee.
6.Findings of the Tribunal:

6.1.The Tribunal while reversing the orders of the Commissioner of Income Tax (Appeals) for the assessment years 1995-96 and 2000-01 and confirming the orders for the assessment years 1996-97, 1997-98, 1998-99 and 2002-03 as well as 2005-06 has held that the objects of the assessee Trust are charitable in nature, the property has been held in Trust by the assessee, there is sufficient compliance of the books of accounts and the business income derived by the property held in Trust is surely incidental to the objects more so when the same is utilised for the above said purposes. Hence by holding so the Tribunal has allowed all the appeals filed by the assessee and dismissed the appeals filed by the Revenue. The Revenue has filed the present appeals, challenging the said orders of the Tribunal by raising the above referred substantial questions of law.

9.Submissions of the assessee:

9.1.Shri.V.Ramachandran, learned senior counsel appearing for the assessee submitted that the property has been held in Trust by the assessee after its purchase and an order to that effect has been passed by this Honourable High Court in C.S.No.76 of 1973 in and by the order dated 08.03.1973. The assessee has been registered as a Charitable Trust under Section 12(A)(a) of the Act. There is no dispute regarding the object of the assessee Trust which pertains to educational institutions, health etc. The income derived from the business of letting out the building has been utilised for the charitable purposes.